A High Court judge in Belfast has found there was a "real prospect" the Real IRA attack in Omagh in 1998 could have been prevented.
Mr Justice Mark Horner recommended that the UK government undertake a human rights compliant investigation into the bombing and urged the Irish Government to do likewise.
He said he was not going to order that the probe take the form of a public inquiry, explaining that he did not want to be "prescriptive".
He also said he did not have the powers to order the authorities in the Republic to act, but he expressed hope the Irish Government would take a decision to order one.
Campaigners launched the action in 2013 in an attempt to force an inquiry into bombing, which killed 29 people, including a woman pregnant with twins.
It was the worst single atrocity of the Northern Ireland conflict.
On 4 August 1998, 11 days before the bombing, the RUC received an anonymous telephone call warning there would be an "unspecified" terrorist attack on police in Omagh on 15 August.
The force's Special Branch, which handled intelligence from agents, took limited action on the information and a threat warning was not sent to the sub-divisional commander in Omagh, an investigation by former police ombudsman Nuala O'Loan found.
An RUC review concluded in 2000 that the information should have been passed to the commander.
Mr Justice Horner told Belfast High Court: "I am satisfied that certain grounds when considered separately or together give rise to plausible allegations that there was a real prospect of preventing the Omagh bombing.
"These grounds involve, inter alia, the consideration of terrorist activity on both sides of the border by prominent dissident terrorist republicans leading up to the Omagh bomb.
"I am therefore satisfied that the threshold under Article 2 ECHR (European Convention on Human Rights) to require the investigation of those allegations has been reached."
Michael Gallagher, whose son Aiden was killed in the 15 August 1998 blast, launched the judicial review after former Northern Ireland secretary Theresa Villiers decided not to order a public inquiry.
Ms Villiers argued that a probe by former police ombudsman Dr Michael Maguire was the best way to address any outstanding issues.
Mr Justice Horner said in his ruling: "Any investigation will have to look specifically at the issue of whether a more proactive campaign of disruption, especially if co-ordinated north and south of the border, had a real prospect of preventing the Omagh bombing, and whether, without the benefit of hindsight, the potential advantages of taking a much more aggressive approach towards the suspected terrorists outweighed the potential disadvantages inherent in such an approach."
In the brief hearing, Mr Justice Horner only read the conclusion of his judgment to Belfast High Court.
He explained he was unable to read the full open judgment setting out his reasoning because the person whose job it was to check the document to ensure it did not contain sensitive material was self-isolating with Covid-19.
Responding to the judgment, Northern Ireland Secretary Brandon Lewis said: "The Omagh bombing was a terrible atrocity that caused untold damage to the families of the 29 people who were tragically killed and the 220 who were injured. The reverberations of that awful event were felt not just in Northern Ireland, but across the world.
"I want to put on record my deep regret that the families of those killed and wounded have had to wait so long to find out what happened on that terrible day in 1998. They deserve answers and I have great respect for their patience, grace and determination.
"We recognise that today the court has set out that there are 'plausible allegations that there was a real prospect of preventing the Omagh bombing' and that more should be done to investigate this.
"The UK government will take time to consider the judge's statement and all its recommendations carefully as we wait for the full judgment to be published."
Earlier this year, former first minister Arlene Foster said the Omagh families deserved an apology over the delay to the ruling.
She said: "No one should be expected to wait eight years for a court judgment."
At the time the lord chief justice's office said the judgment was "taking longer than initially anticipated".
It added: "Due to the sensitive nature of the material involved in this case, the court is required to produce both an 'open judgment', which has been prepared in draft, and a 'closed judgment', which has to be completed before the open judgment can be published.
In their legal case the Omagh families claimed that intelligence from British security agents and Royal Ulster Constabulary officers could have been drawn together to prevent the dissident republican bombing.